I run a large small business, by which I mean that it seems to require a tremendous amount of work for the money it makes. My company runs parks and campgrounds under concession contracts with public recreation authorities, and I am currently spending a lot of time helping various parks organizations keeps parks open in a world of declining budgets.
I have been an entrepreneur in Phoenix, Arizona for ten years, before which I worked from other people in companies as large as Exxon and as small as 3-person Internet startups. I have an MBA from the Harvard Business School and a mechanical engineering degree from Princeton University.
I was a relatively early entrant into the blogging world, writing a libertarian blog called Coyote Blog. I also blog at Climate-Skeptic.com on global warming and climate change issues and at ParkPrivatization.com on trends in recreation privatization. I have written a novel called "BMOC" and several books and videos on climate change.

11/24/2010 @ 1:29PM27,170 views

The EPA's Electric Vehicle Mileage Fraud

Update: I wanted to provide a brief summary of what you will find below. In short, the government wants an equivilent MPG standard for electric cars that goes back to the power plant to estimate that amount of fossil fuels must be burned to create the electricity that fills the batteries of an electric car. The EPA’s methodology is flawed because it assumes perfect conversion of the potential energy in fossil fuels to electricity, an assumption that violates the second law of thermodynamics. The Department of Energy has a better methodology that computes electric vehicle equivalent mileage based on real world power plant efficiencies and fuel mixes, while also taking into account energy used for refining gasoline for traditional cars. Using this better DOE methodology, we get MPGe’s for electric cars that are barely 1/3 of the EPA figures.

In a parking lot near Detroit, General Motors is accumulating Chevy Volts. They cannot yet be sold to the public because the Environmental Protection Agency (EPA) has not yet delivered the required mileage sticker for the window. We can, though, get a preview of how the EPA may complete this admittedly tricky task from the mileage numbers they recently assigned to the all-electric Nissan Leaf. The Leaf’s numbers make it clear that this Administration is willing to resort to accounting fraud to promote its automotive agenda.

The traditional metric for automobile efficiency is miles per gallon (MPG) of gasoline used. But what does MPG even mean for a vehicle that doesn’t burn liquid fuel? Most of us would agree that the Leaf certainly does use fuel — after all, something must create the electricity, and in the US that is generally some sort of fossil fuel. So theoretically we should be able to create an MPG equivalent, or MPGe for short, to measure the fossil fuel use of electric vehicles.

For more than a decade, within the EPA and the Department of Energy (DOE), a number of different approaches to this problem have been discussed. With the release of the numbers for the Nissan Leaf, we now know what approach the EPA is taking, and results are depressing for those of us who would like to see transparency and adherence to science in the Administration. This Administration has a huge intellectual investment in electric vehicles and financial investment in the Chevy Volt. Like a shady company trying to pump up their stock by choosing a series of highly questionable accounting conventions, the EPA has chosen an approach that grossly overestimates the MPGe of electric vehicles.

The Nissan Leaf was rated at 99 MPGe. To reach this number, the EPA created a conversion factor between a quantity of electric energy, measured in kilowatt-hours (KwH) and a volume of gasoline, measured in gallons. They did this be dividing the potential energy or heating value of a gallon of gasoline (115,000 BTUs) by the energy in a KwH of electricity (3412 BTUs) to get a conversion factor of 33.7 gallons per KwH. Using this factor, they can convert miles per KwH of electricity in an electric vehicle to an MPGe that is supposedly comparable to more traditional vehicles.

The problem is that, using this methodology, the EPA is comparing apples to oranges. The single biggest energy loss in fossil fuel combustion is the step when we try to capture useful mechanical work (ie spinning a driveshaft in a car or a generator in a power plant) from the heat of the fuel’s combustion. Even the most efficient processes tend to capture only half of the potential energy of the fuel. There can be other losses in the conversion and distribution chain, but this is by far the largest.

The EPA is therefore giving the electric vehicle a huge break. When we measure mpg on a traditional car, the efficiency takes a big hit due to the conversion efficiencies and heat losses in combustion. The same thing happens when we generate electricity, but the electric car in this measurement is not being saddled with these losses, even though we know they still occur in the system.

Lets consider an analogy. We want to measure how efficiently two different workers can install a refrigerator in a customer’s apartment. In both cases the customer lives in a fourth floor walkup. The first installer finds the refrigerator has been left on the street. He has to spend much of his time struggling to haul the appliance up four flights of stairs. After that, relatively speaking, the installation is a breeze. The second installer finds his refrigerator has thoughtfully been delivered right to the customer’s door on the fourth floor. He quickly brings the unit inside and completes the installation.

So who is a better installer? If one only looks at the installer’s time, the second person looks orders of magnitude better. But we know that he is only faster because he offloaded much of the work on the delivery guys. If we were to look at the total time of the delivery person plus the installer, we’d probably find they were much closer in their productivity. The same is true of the mileage standards — by the EPA’s metric, the electric vehicle looks much better than the traditional vehicle, but that is only because someone else at the power plant had to do the really hard bit of work that the traditional auto must do itself. Having electricity rather than gasoline in the tank is the equivalent of starting with the refrigerator at the top rather than the bottom of the stairs.

An apples to apples comparison, then, would compare the traditional car’s MPG with the Leaf’s miles per gallon of gasoline (or gasoline equivalent) that would have to be burned to generate the electricity it uses. Incredibly, the DOE actually established and published such a standard in a rules-making process way back in Clinton Administration. The standard, called “well to wheels,” adds a couple new factors to the MPGe calculation we discussed above.

First, the DOE looked at the electrical generation efficiency, and determined that only 32.8% of the potential energy in the fossil fuel becomes electric energy in the average US power plant, which it further reduced to 30.3% to account for transmission losses. However, they realized it was unfair to charge electric vehicles for these losses without also charging gasoline-powered vehicles for the energy cost of refining and gasoline distribution. They calculated these as adding 20% to the energy it takes to run a gas-powered car, but rather than reducing existing MPG standards by this amount, they instead gave a credit back to electric vehicles. The 30.3% electric production and distribution factor was increased to a final adjustment factor of 36.5%. This means that the conversion factor discussed above of 33.7 gallons/KwH must be multiplied by 36.5% to get a true apples to apples MPGe figure.

The end result is startling. Using the DOE’s apples to apples methodology, the MPGe of the Nissan Leaf is not 99 but 36! Now, 36 is a good mileage number, but it is pretty pedestrian compared to the overblown expectations for electric vehicles, and is actually lower than the EPA calculated mileage of a number of hybrids and even a few traditional gasoline-powered vehicles like the Honda CR-Z.

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Your “end result” is not nearly as startling as the fact that you, a putative mechanical engineer, are willing to believe that one kilowatt hour of electricity is equivalent to more gasoline than it takes to fill the tank of a Hummer H2. Harvard doesn’t surprise me, but I’m surprised that Princeton let you pass without learning arithmetic.

Since you’re a graduate of the HBS, I can use an economic argument without fear of confusing you: One kilowatt hour of electricity costs a fraction of a dollar. One gallon of gasoline costs several dollars. If each is priced according to energy content, then one gallon of gasoline must be equivalent to more than one kilowatt hour of electricity, and not the other way ’round. (Your finance professor must be so proud of you.)

Perhaps you can revisit your rant on Carnot efficiency after you’ve mastered arithmetic. Until you do, your calculations are all of course suspect.

Kudos to “visionofficer” for exhibiting some common sense, and thanks to “mikewinddale” for reprising the doctors of “Le Malade imaginaire” for our amusement.

Your point regarding a Wells to Wheels approach is well taken. But power station efficiency plus transmission losses plus electric motor efficiency should still come out well ahead of gasoline engine efficiency and, in general, power station fuel is much cheaper than oil. Therefore, equivalent MPG should be better and fuel costs lower and the fuel is from domestic sources.

The car in question looks very nice but how much will it cost? The Fisker Karma web site seems to be remarkable clean of anything as dirty as a $ sign. One suspects the cost of gasoline will be of minor concern to anyone who can afford one. Even the more pedestrian Chevy Volt is expensive compared to a Honda Civic.

It would be better to tax the problem fuels, imported oil or dirty coal, and let the market pick winning solutions for lowering vehicle operating costs. If only the GOP had not locked itself into an unsustainable position on taxes we would all be better off. My bet is the price of oil would have declined by the same amount of any tax imposed and we would be using it for domestic development instead of bleeding money overseas.

Many European vehicles are more efficient diesels but they do have bigger emissions problems. With the price of natural gas many times lower than gasoline, it is a surprise we do not have any choices for natural gas fueled SUVs and larger pick-up trucks that have high gasoline fuel bills.

You wrote:”This Administration has a huge intellectual investment in electric vehicles and financial investment in the Chevy Volt.”

The Volt has been in production for many years, long before the previous owners of GM ran their company into bankruptcy, as far back as 2006. All that the current 311 million owners of GM are doing is completing a project begun by others at very little additional cost, a pittance compared to the industrial supports given to other industries.

I have put updates in the original article in response to a number of the comments, but I would make these two general points:

1. Those who want to argue that mpg standards should only look at efficiency using whatever fuel (gas or electric) that is in the “tank” of the car, I suppose this is a valid argument. Except that it really misses the point of how these mpg standards are used. The only point in converting an electric car efficiency number to an artificial equivalent of mpg is to compare how efficiently electric cars use fossil fuels vs. gasoline cars. To this goal, the EPA methodology is flawed. No matter how we wish it might change, the marginal fuel for incremental electric demand is not solar or wind, it’s generally some kind of fossil fuel, and usually natural gas turbines.

2. Folks have pointed out that gasoline takes energy as well to refine. I agree. That is why the DOE methodology used actually penalizes gasoline engines for refining and transportation costs. Actually, since we already have gasoline engine MPGs that have been set a certain way for years, the DOE methodology instead gives a credit for these refining costs to the electric car. Without this credit for not requiring gasoline refining, the electric car MPG by the DOE methodology would be even lower. Again, I encourage those looking to poke holes in the methodology to at least read the original article, and, even better, the DOE paper. It is certainly possible the DOE made a mistake and uses too low a number for refining costs or perhaps the wrong fuel mix in its assumptions. However, I find its approach much more sensible than that of the EPA — that is, if we actually care about useful comparable numbers and not just adding marketing hype to a particular technology the Administration has gone “all in” for.

You post was titled “The EPA’s Electric Vehicle Mileage Fraud”. Fraud is crime, in this case it would be felony, so that big word. Fraud is the intentional misrepresentation of facts made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. With this in mind, it would sound like you are preparing to bring a complaint to a grand jury.

Now however you are writing:”Those who want to argue that mpg standards should only look at efficiency using whatever fuel (gas or electric) that is in the ‘tank’ of the car, I suppose this is a valid argument.” That is quite a difference, a felony versus a difference of opinion.

You claim to be making a reasoned and honest “apples to apples” assessment, yet you all but trivialize the energy required to produce gasoline. If you won’t even bother to look into this, how can you claim your argument has ANY merit?

It took about 3 minutes to learn that refining process alone (not the pumping, not the transporting, not the cleanup, not the going to war) runs at 85% efficiency. Which means that producing a gallon of gas requires about 6kwh.

6kwh will run my car for about 22 miles.

Clearly you put a lot of effort toward looking into at least one side of the story. But I’m sure you don’t have any agenda here?

Any conversion between electric power and gallons of gasoline is dodgy. Electricity from wind, solar (for daytime charging) or nuclear can’t really be converted to gallons except for the gallons you are saving by not using gas. Rather than try to factor in combustion efficiency, it’s best to stick with energy/100 km, which the EPA publishes along with MPGe. The energy/distance gives you a good way to compare electrics, and then you can compare to gas in different ways depending on what question you are asking.

If you are trying to stop changing the CO2 content of the atmosphere, you should sign up for wind electric power and can then remove 100% of the CO2 emissions by driving an electric car. If you are interested in comparing cost, take

($/kWhr)X(kWhr/mi)

to get cost per mile for an electric vehicle. Typical electric rates are around $.12/kWhr, the Volt gets .36kWhr/mi, so that’s $.043/mi. For a gas car, cost/mile is

($/gallon)/(mi/gallon),

which for a Prius at recent gas prices is about ($3.50/gallon)/(50mi/gallon)=$.070/mi.

kWhr is a unit of energy and can be used for all energy, not just electric power. It might make more sense to convert gallons of gasoline to kWhr and then use the kWhr/mi measurement for gasoline-engine cars as well as electric. This way we have one measure (energy/mi) for efficiency of a car no matter what kind of engine. We still have to be careful in estimating the environmental impact, because (like the EPA’s MPGe), this does not include the waste heat if the electricity was created by burning fuel.

Small point. Honda Cr-Z is in fact a Hybrid car very little different from the Insight II or the Honda Civic Hybrid. Biggest difference is that the transmission is set to go faster for a sportier feel, but that hampers the mileage stats. With a different tuneup on the trans it could easily get 50-60 mpg. http://automobiles.honda.com/cr-z/performance.aspx

I found your article as I was researching information on how to compare electric to gas efficiencies. I conclude that you are totally wrong. Let me illustrate three different methods to calculate the mile per gallon equivalent.

I drove my Electric 1985 Chevy S10 for 41 miles, interstate and city, and used 14.55kWh of electricity to refuel it.

I read through the DOE paper you referenced. It appears you eliminated the ‘‘Fuel Content’’ Factor from the equation. On page 2, they summarize the formula as, “mpg = PEF (Wh/gal) / combined [electrical] energy consumption (Wh/mile)”. The DoE paper states PFE=82,049 Wh/gal for a pure electric vehicle.

3. Based on DoE paper you referenced.

Following the method they prescribe, we first need to calculate the Wh/mile for my trip: